The premium subsidy
First worked before July 1, 2008: Maximum subsidy: the system pays 80% of the premium (90% for those already enrolled and Medicare-eligible / 65+ on Jan. 1, 2013). Planning Your Retirement (R0613C, 5/26), pp. 24, 33 ('Maximum subsidy (80% of the premium)'); MPSERS annual report FY2025, p. 29 (90% for those Medicare eligible and enrolled on Jan. 1, 2013); MCL 38.1391(1), (4)
First worked July 1, 2008 - Sept. 3, 2012: Vested and first worked July 1, 2008 - July 1, 2010 (MIP Plus): MIP 46 with 30 = maximum (80%); 25+ years retiring early reduced = maximum; MIP 60 with 10 with 10-23 years = graded from 30% at 10 years plus 4% a year, up to 80%; early reduced under 25 years = graded subsidy at 60. Planning Your Retirement (R0613C, 5/26), pp. 24-25, Graded premium subsidy; MCL 38.1391(8)
| Years (graded, at 60) | System pays |
|---|---|
| 10 | 30% |
| 15 | 50% |
| 20 | 70% |
| 23 | 80% |
| 25 | 80% |
Deferred members: Deferred members (terminated after Oct. 31, 1980, first member by June 30, 2008): no subsidy with 20 years or less; 21 years = 10% of the maximum (8% of the premium), +10% of the maximum per year, full at 30. Planning Your Retirement (R0613C, 5/26), p. 27, Deferred member insurance premium costs; MPSERS annual report FY2025, p. 30; MCL 38.1391(7)
| Years (deferred) | System pays |
|---|---|
| 20 | 0% |
| 21 | 8% |
| 25 | 40% |
| 28 | 64% |
| 30 | 80% |
Treated as active for the subsidy if you earned 0.1 year in each of the 5 fiscal years before retirement, or 0.5 year in the 2 fiscal years before, and worked the month before the effective date. Planning Your Retirement (R0613C, 5/26), pp. 27-29; MCL 38.1391(11)
Members with the premium subsidy no longer contribute toward it: the 3% healthcare contribution ended Oct. 1, 2025 under PA 127 of 2024. MPSERS annual report FY2025, p. 8, Public Acts 120 and 127 of 2024; ORS employer manual 6.03.03, Pension Plus and Pension Plus 2 plans (last updated 10/01/2025), footnote ('Effective Oct. 1, 2025, members with the premium subsidy benefit are no longer required to contribute'); MPSERS contribution rates for K-12, ISDs, charter schools, libraries and community colleges (R1078C Rev. 02/2026), effective Oct. 1, 2026 - Sept. 30, 2027, p. 1 (no member premium-subsidy rate)
The share of your premium MPSERS pays is cited, but the current dollar premiums are on a rate sheet (R0072C) we don't have.
We show percentages only, no dollar premiums.
The 80% maximum (90% grandfathered) and the graded and deferred schedules are cited; dollar premiums are in the Monthly Insurance Rates (R0072C) sheet, which the user could not find.Buying service can delay the subsidy
Credit purchased on or after July 1, 2008 that lets you retire earlier delays the insurance subsidy to age 60 or the date you would have been eligible without it, whichever comes first. Planning Your Retirement (R0613C, 5/26), p. 26, Delayed subsidy; MPSERS annual report FY2025, p. 30; MCL 38.1391(10)
- Jon needs his 2 purchased years to qualify for the early reduced pension, so his subsidy is delayed two years. Delay: 2 years.
- Sara could retire early reduced without the purchase; she uses it to retire with the full pension, so her subsidy is not delayed. Delay: 0 years.
The Personal Healthcare Fund
Who: Members who first worked on or after Sept. 4, 2012 (Pension Plus, Pension Plus 2 and DC), and pre-2012 members who opted in during the 2012 reform. You put in 2% and your employer matches 2%. With 10+ years, at your first termination of employment you get $2,000 (60 or older) or $1,000 (under 60) in a health reimbursement account. Not eligible for subsidized insurance; may enroll in the retiree plans at retirement but pays the full premium; cannot re-enroll after dropping. Planning Your Retirement (R0613C, 5/26), pp. 22-23, PHF; MPSERS annual report FY2025, p. 30; ORS employer manual 6.03.03, Pension Plus and Pension Plus 2 plans (last updated 10/01/2025), Personal Healthcare Fund (2.0% / 2.0%); MCL 38.1391a(1), (2), (10)
Medicare, family and enrollment
- If eligible, Medicare Parts A and B must be in place the month of your 65th birthday; the retiree plans are Medicare Advantage plans; do not enroll in a separate Part D plan. Planning Your Retirement (R0613C, 5/26), pp. 30-31, Medicare
- Who you can cover: Spouse; children by birth, adoption or legal guardianship until the end of the month they turn 26; unmarried children who are totally and permanently disabled and dependent on you; one set of parents or parents-in-law living in your household. Stepchildren are not eligible. Planning Your Retirement (R0613C, 5/26), p. 29, Dependent coverage
- Coverage can start on the retirement effective date (or up to 90 days later). ORS must receive the application and proofs within 30 calendar days after the effective date, or coverage starts six months after they arrive. Planning Your Retirement (R0613C, 5/26), pp. 22-23, 34-38
- Enrolling later: ORS gets your forms February 10, 2026, coverage starts August 1, 2026. PHF members must enroll at retirement; anyone who drops coverage cannot re-enroll. Planning Your Retirement (R0613C, 5/26), pp. 22-23, 34-38
Related guides
Your first day of work decides subsidy or Personal Healthcare Fund; see Which plan am I in? If you plan to buy service, read Buying service credit first, because of the delay above. Going back to work after you retire can also stop your subsidy; see Working after retirement.
What the sources say
- Your retiree health benefit is either the premium subsidy (the system pays part of your premium) or the Personal Healthcare Fund (a 401(k)/457 savings fund; you pay the full premium).Planning Your Retirement (R0613C, 5/26), p. 22
- If you first worked before July 1, 2008 and kept the premium subsidy, the system pays 80% of the premium.MCL 38.1391(1); Planning Your Retirement (R0613C, 5/26), pp. 24, 33
- If you first worked July 1, 2008 - Sept. 3, 2012, the subsidy is graded: 80% with 25+ years; with 10-24 years, at 60 you get 30% at 10 years plus 4% for each extra year, up to 80%.MCL 38.1391(8); Planning Your Retirement (R0613C, 5/26), p. 25
- Deferred members (left before retirement age) with 20 or fewer years get no subsidy; 21 years gets 8% of the premium, rising to 80% at 30 years.MCL 38.1391(7); Planning Your Retirement (R0613C, 5/26), p. 27
- Everyone who first worked on or after Sept. 4, 2012 has the Personal Healthcare Fund: you put in 2% and your employer matches 2%, and with 10 years you get a one-time $2,000 (60 or older) or $1,000 (under 60) health reimbursement credit when you leave.MCL 38.1391a(1)-(2), (10); New Hire Retirement Plan Election (R0940C, 9/2012), p. 1; Choosing Your Retirement Plan (R2053C Rev. 9/24), p. 12
- Buying service credit on or after July 1, 2008 to retire earlier can delay the subsidy until 60 or the date you would have qualified without it.MCL 38.1391(10); Planning Your Retirement (R0613C, 5/26), p. 26
- Once eligible, you must have Medicare Parts A and B in place the month you turn 65 to stay in the retiree plans, and you must not join a separate Part D plan.Planning Your Retirement (R0613C, 5/26), pp. 30-31
- Since Oct. 1, 2025, members with the premium subsidy no longer pay the 3% retiree health contribution.MPSERS annual report FY2025, p. 8 (PA 127 of 2024); ORS employer manual 6.03.03, footnote
- Your children can be covered until the end of the month they turn 26. Stepchildren are not eligible.Planning Your Retirement (R0613C, 5/26), p. 29, Dependent coverage
- If you enroll after retirement without a qualifying event, coverage starts the first day of the sixth month after ORS gets your forms: forms received Feb. 10 means coverage Aug. 1.Planning Your Retirement (R0613C, 5/26), p. 38
Questions
How much of my retiree health premium does MPSERS pay?
If you first worked before July 1, 2008 and kept the premium subsidy, the system pays up to 80% of the premium. Members who first worked from July 1, 2008 to Sept. 3, 2012 get a graded subsidy. Members hired on or after Sept. 4, 2012 have the Personal Healthcare Fund instead.
What is the Personal Healthcare Fund?
You put 2% of pay into the State of Michigan 401(k)/457 plans and your employer matches 2%. With 10 years you also get a one-time credit of $2,000 (age 60 or older) or $1,000 (under 60) when you leave. You can join the retiree plans but pay the full premium.
Do I still pay the 3% retiree health contribution?
No. It ended October 1, 2025.
Can I enroll after I retire?
Yes, with the premium subsidy. Without a qualifying event, coverage starts the first day of the sixth month after ORS has your forms: received February 10, 2026, coverage August 1, 2026. Personal Healthcare Fund members must enroll at retirement.
Unofficial guide. MPSERS and the Office of Retirement Services decide your coverage. Premiums change each year.
Source: Planning Your Retirement (R0613C), Michigan Office of Retirement Services, Rev. 5/26, pp. 22, 22-23, 24, 24-25, 25, 26, 27, 27-29, 29, 30-31, 32, 33, 34-38, 38. MPSERS Annual Comprehensive Financial Report, FY ended Sept. 30, 2025, pp. 8, 29, 30. Michigan law, 1980 PA 300: MCL 38.1391; MCL 38.1391a. ORS employer pages saved Nov. 12, 2026: Reporting Instruction Manual 6.03.03. ORS contribution rate table, Oct. 1, 2026 - Sept. 30, 2027 (R1078C Rev. 02/2026). New Hire Retirement Plan Election (R0940C), 9/2012, p. 1. Choosing Your Retirement Plan (R2053C), Rev. 9/24, p. 12. Last reviewed .